Initial Public Offerings

The lead story in the Feb. 2 Business section is headlined, "Order BK's shares your way." This, of course, is a cute play on the "Have it your way" campaign that sold a lot of hamburgers. But if there is one thing about shares sold in initial public offerings, it is that they are homogeneous. Every share is exactly like every other share. So, I respectfully submit, the headline is not really cute, it is just stupid and thus demeaning to your fine newspaper and your readership.

Shares of Bankrate Inc., an online publisher based in North Palm Beach, rose 1 percent after falling earlier in the first day of trading after its initial public offering. The stock rose 34 cents to close at $15.34. Bankrate, which publishes consumer interest-rate information, sold 20 million shares at $15 each, raising $300 million, and setting a market value of about $1.5 billion for the company. "Our business is on a very good trajectory, and we think there's significant growth in the company over the next several years," Thomas Evans, president and chief executive officer of Bankrate, said in an interview on Bloomberg Television.

Although more venture capital-backed companies opt for mergers and acquisitions rather than initial public offerings, those that choose IPOs are going to market sooner than in the past, consultant Coopers & Lybrand says. In 1994, the average venture-backed company that went public was 4.8 years old. Last year, it was trimmed to 4.2 years, and this year, the average may slide to 3.8 years, said Jim Atwell, director of Coopers' venture-capital group in San Jose, Calif. Venture-backed companies planning to go public in the next year or so may try to develop their products faster, and institutional investors may be willing to take on more risk in buying their shares, Atwell said.

Excitement often surrounds initial public offerings from companies with new products or services, with buyers eager to snap up a limited number of shares. But before plunging into an IPO, do your homework. Buying IPO stock involves some special considerations. Some tips: Read the prospectus. This has lots of information about the company, its history and its strategy. You can find the prospectus on the Securities and Exchange Commission website. Pay special attention to the risk factors in the prospectus.

Home Savings Bank of Hollywood went public in January, and the stock of its holding company was issued at $10 a share. Now it trades at about $20. Could becoming a thrift depositor be a shrewd move for stock investors? It could be if it is a mutual chartered thrift (one owned by its depositors) that plans to convert to a stock savings and loan. Investors have to get in early to be lined up for such initial public offerings, but those who did have been richly rewarded in recent months.

Initial public offerings by Internet companies TD Waterhouse Inc. and Barnesandnoble.com Inc. have helped make 1999 a record year for new share sales, topping $45.61 billion. Wednesday's share sale by Be Free, an online marketing company, increased money raised through initial public offerings above the record, set in 1996 when $45.6 billion of shares were sold, according to research firm CommScan LLC. A total of 419 companies have gone public this year. Internet companies such as TD Waterhouse, the No. 4 Internet broker in the United States, and Barnesandnoble.

The real estate investment trust industry continues to draw in dollars in huge amounts and the number of publicly traded REITs continues to grow, trends that are making it ever harder for investors to get a handle on the popular asset class. Since the end of 1992, about $14.5 billion has been raised by REITs through initial public offerings. That's more than what the industry raised in the previous 31 years combined. According to the National Association of Real Estate Investment Trusts (NAREIT)

NEW YORK -- The end of the 1980s was tough on the traders and managers of Wall Street, with year-end bonuses sometimes as thin as their fine Swiss watches. But the `90s have brought back prosperity, and envelopes bearing bonuses of three and four times base pay are back in fashion. "Nineteen ninety-two was an exceptionally good year for Wall Street," said Joan Zimmerman, executive vice president of the executive recruiting firm G.Z. Stephens Inc. "It wasn`t the fabulous record year `91 was, but it was certainly solid in profitability."

Funds must disclose sudden drops Mutual funds that tout their performance in their advertising must also disclose any sudden and significant drops that would make the figures in the ads misleading, according to NASD Regulation, the self-regulatory arm of the National Association of Securities Dealers. In its most recent quarterly newsletter, Regulatory and Compliance Alert, NASD Regulation said that failing to disclose an abrupt change in performance could make the ads unfair and misleading.

Excitement often surrounds initial public offerings from companies with new products or services, with buyers eager to snap up a limited number of shares. But before plunging into an IPO, do your homework. Buying IPO stock involves some special considerations. Some tips: Read the prospectus. This has lots of information about the company, its history and its strategy. You can find the prospectus on the Securities and Exchange Commission website. Pay special attention to the risk factors in the prospectus.

American voters, angry at politicians and mistrustful of government, gave many incumbents their walking papers in recent elections. But there's another protest movement under way that's just as fierce, though less conspicuous: Investors are dissing Wall Street in addition to purging Capitol Hill. The trend is expressed in the flow of $56 billion out of the stock market this year, despite the type of rally that typically tempts reluctant investors, and in the hundreds of e-mails I've received.

The lead story in the Feb. 2 Business section of is headlined, "Order BK's shares your way." This, of course, is a cute play on the "Have it your way" campaign that sold a lot of hamburgers. But if there is one thing about shares sold in initial public offerings, it is that they are homogeneous. Every share is exactly like every other share. So, I respectfully submit, the headline is not really cute, it is just stupid and thus demeaning to your fine newspaper and your readership.

Companies went public in the U.S. at the slowest pace in 27 years in the first quarter, and underwriters and investors say new share sales will remain scarce until the war in Iraq ends and economic growth picks up. Endurance Specialty Holdings Ltd., a Bermuda-based reinsurer, and Infinity Property & Casualty Corp., an auto insurer, were among five companies that completed initial public offerings in the first three months of 2003. That's the fewest since the fourth quarter of 1975, according to Jay Ritter, a University of Florida professor who studies IPOs.

When Simon D. Roffe graduated from the Stern School of Business at New York University in 1998, he wanted to be a professional investor. He raised a few hundred thousand dollars from family and friends and nearly tripled his money the next year by buying many of the bull market's hot new technology stocks. Then those stocks came crashing back to earth. "I learned from my mistakes," Roffe, 25, wrote in a recent e-mail message. "I expected to get rich quickly. I went from driving a Porsche Boxster to being unemployed virtually overnight."

It was just four months ago that business owners in South Florida were reaping huge rewards by taking their companies public with little more than an idea and a dot-com after their name. The companies rarely had revenues or profits. Then, the March 8 correction occurred, and the market for initial public offerings weakened. Lessons were learned from the recent IPO craze. Analysts and investors, for example, are back to looking at fundamentals and adhering to age-old business philosophies and practices.

The nation is basking in unprecedented prosperity. What better time, Jason Zasky asked himself, for an online magazine about failure? "Things have been taken to the extreme in success in recent years. Failure doesn't really get the respect it deserves," Zasky said from his office in Scarsdale, N.Y. "Failure is usually treated in a predictable way, either negatively or ironically. It's not interesting." But can it be lucrative? Zasky and his co-founder, Kathleen Ervin, hope so. Their magazine, at www.failuremag.

-- Fort Lauderdale-based penny stock firm Biltmore Securities was expelled from the securities industry and the firm and its two principal owners agreed to pay a $7.1 million penalty to settle stock-manipulation charges. The unusually large penalty, which includes $6.1 million for investor refunds, was imposed by the National Association of Securities Dealers. Biltmore defrauded investors and made illegal profits by manipulating five Nasdaq Stock Market securities from 1993 to 1995, the NASD's regulatory unit alleged.

I'm a big bargain hunter. I walk around the supermarket skimming off sale items and stocking up on whatever's on sale. If it's not perishable, buy it now and save it for when you need it, is my policy. Why pay full price for shampoo, toilet paper or canned fruit? For the last few months, I've been going crazy on the Internet. Our closets are so full that my wife is threatening to start throwing things in the street. Internet retailers have been showering customers with coupons, discounts and electronic gift certificates.